Directed technological change & cross-country income differences: A quantitative analysis

Michal Jerzmanowski and Robert Tamura

Journal of Development Economics, 2019, vol. 141, issue C

Abstract: Understanding international income differences requires measuring supplies of multiple production factors and their productivity. Recent work suggests that heterogeneous workers should be treated as imperfect substitutes. Using a model of endogenous directed technological change and a new data set on labor force composition we construct productivity for workers in three skill categories for 63 countries from 1910 to 2010 (up to 83 additional countries for 1950–2010). Rich countries use all skill categories more efficiently. Poor countries have a large technology adoption wedge, which prevents them from using low-skill labor more efficiently. Reducing the technology adoption wedges would have a much larger impact on standards of living than skill upgrading of the workforce.

Date: 2019
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Working Paper: Directed Technological Change & Cross Country Income Differences: A Quantitative Analysis (2017)
Working Paper: Directed Technological Change & Cross Country Income Differences: A Quantitative Analysis (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:deveco:v:141:y:2019:i:c:s0304387818305820

DOI: 10.1016/j.jdeveco.2019.102372

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